Program benefiting farms and ranches gutted

Gov. Arnold Schwarzenegger's redline of a tax break for state farm and ranch owners Tuesday frustrated and angered north state lawmakers, farmers and landowners.

Schwarzenegger slashed $27.8 million statewide from the Williamson Act program, which provides money to counties that give tax breaks to landowners who keep their land as open space.

"That's a joke," said Burt Bundy, president of the Tehama County Farm Bureau. "The (state's) farm bureau will come unglued. That's something that's been pretty sacred as far as we're concerned. It'll certainly hurt."

Officials at both the state and county level are still trying to figure out just how much the cut will hurt.

"There's a lot of legal questions," said Larry Lees, Shasta County Administrative Officer.

Under the Williamson Act, landowners sign 10-year contracts with the county that allow ranchers and farmers to pay property taxes based on what they produce on their land, instead of charging them the same taxes residential landowners pay.

The state then reimburses the counties the difference.

As a result, county governments - not farmers - will initially see the effect from the funding cuts, said Assemblyman Jim Nielsen, R-Gerber.

Counties would see an immediate reduction in their budgets - Tehama County would lose just under $1 million and Shasta County would lose about $225,000.

"That's discretionary dollars," Lees said, meaning the money can be used for just about anything.

Bundy said most ranches and farms under Williamson Act protection might be temporarily safe from drastic tax increases because of the 10-year contracts. But he was quick to add that he didn't know for sure.

"This is pretty new ground," he said.

In the Legislature, Nielsen had proposed a one-year, 20 percent cut in the program instead of a complete reduction. That was rejected when the governor's office decided to cut Williamson Act funding altogether.

Nielsen said he worries the governor's decision could set off a chain reaction. With Williamson Act protection being used as a political football, county supervisors will be more reluctant to enter into new contracts with ranchers and farmers, he said.

Without Williamson Act money, those landowners, in turn, will find it more lucrative to sell their land rather than work it and, over the next few decades, the state will see tens of thousands of acres of ranch and farmland disappear, Nielsen said.

But, he added, "there are opportunities to gain a part or full restoration of the Williamson Act."

Nielsen hopes when the Legislature reconvenes in August, he can work on a way to make his 20 percent deal win the governor's approval, he said.

In Shasta, Siskiyou, Tehama and Trinity counties, more than 1.4 million acres are protected under Williamson Act contracts, and the counties receive $2 million in subsidies.

Vast swaths of ranch and rangeland are the primary benefactors of the Williamson Act in the north state. Ranchers have long feared that suspending the act would kill their businesses.

Statewide, the $34.7 million subsidy protected 16.5 million acres of farm and ranch land.

Because the governor couldn't unilaterally abolish the program, he cut the budget to a token $1,000, The Associated Press reported.

"With a budget deficit of $26 billion, there are no easy choices," state Sen. Sam Aanestad, R-Grass Valley, said in a statement. "I am sorry that the governor still had to make those cuts."